Dive Brief:
- The US Attorney's office for the Northern District of Illinois has charged contractor Joseph Lampignano with fraud for not paying union employees required wages and benefits despite submitting reports that stated he did, the Chicago Sun Times reported.
- Prosecutors said that Lampignano utilized workers on government-funded projects then shorted them by more than $1.5 million between 2008 and 2013 by underreporting their work hours.
- The U.S. Attorney’s office said Lampignano and his superintendent Giovanni "John" Traversa also demanded kickbacks in the amount of $64,000 from employees who had won a lawsuit against Lampignano's company.
Dive Insight:
This is just the latest case of a contractor charged with trying to avoid paying the required wages on public projects. Last month, New York state authorities charged a contractor with 139 counts of fraud for failing to pay more than $250,000 in union benefits. Prosecutors alleged that Arbor Concrete Corp. owner Kenneth Padover intentionally filed incorrect payroll records indicating that he had paid $268,055.78 in benefits. He could serve up to four years in prison.
In another fraud case, the owner of a Minnesota electrical contracting firm was convicted of 16 counts of "theft by swindle" after prosecutors charged her with intentionally underpaying employees $242,000 on a publicly funded highway project. Laura Plzak allegedly altered certified payroll documents to show that her company, Honda Electric, had paid the appropriate wage rates. Plzak's husband pleaded guilty to similar charges and was sentenced to 22 months in prison.
And in a similar case of over-reporting wages, a Connecticut contractor settled federal charges by agreeing to pay $580,000 after prosecutors alleged it overcharged Amtrak for labor on a bridge project in East Lyme, CT. Authorities said the company billed workers to Amtrak at the maximum of an agreed-upon range of wage rate, even though it actually paid the workers at a lower rate.